mowstn Posted February 15, 2014 Share Posted February 15, 2014 hey guys. does any have experience if an insurance could be necessary for doing competition work? could the architect sue you e.g. if you cant deliver on time and how could the architect estimate the lost value?! so how high and against what would you be insured? cheers, mo Link to comment Share on other sites More sharing options...
notamondayfan Posted February 18, 2014 Share Posted February 18, 2014 A solid contract should outline expectations and deliverables. Also having sign off stages so the client is aware of how the work is developing is key, so there are no suprises at hand-in. Regarding insurance, look up Professional Indemnity / Liability insurance. http://en.wikipedia.org/wiki/Professional_liability_insurance Everyone in our industry should have insurance really, not just for competitions. Link to comment Share on other sites More sharing options...
arnoudschoofs Posted February 18, 2014 Share Posted February 18, 2014 Mo, in our contract it clearly states that we're not liable for the result of the competition. The architectural competition is their financial risk; For architects an architectural competition equals changing everything until the deadline. On such moments we clearly communicate to them that we can no longer guarantee full quality, timing, etc. if they really want us to alter things. They usually understand. I also agree with Dean that you should have an overall liability insurance, hardware insurance etc.. Link to comment Share on other sites More sharing options...
Scott Schroeder Posted February 18, 2014 Share Posted February 18, 2014 If you fail an architect for a competition, they won't be happy at all and I think being sued would be the least of your worries. I'd think you'd end up in a 50 gallon drum somewhere in New Jersey. That is probably the absolute worst deadline to miss. If you think you can't deliver on time, don't even accept that job. Can you afford insurance on a $100-150 million potential large scale project? If you get insurance, you'll probably need a contact for the insurance to be valid. If you miss the deadline because of your own failures, that negates the contract and that negates the insurance. Now if you miss due to illness, natural disaster, act of God (power outage, tree limb falling through your roof and crushing your computer), etc then the insurance may help you. It's rare that an architect will let you fail on a competition deadline. Most of the time, they know you are behind and they'll just tell you, "Nice effort." and ask you to never contact them again as they'll give the job to someone who can deliver on time. Link to comment Share on other sites More sharing options...
RyderSK Posted February 18, 2014 Share Posted February 18, 2014 If you miss the deadline because of your own failures, that negates the contract True. ... and that negates the insurance Why would that be the case ? That's exactly what the above mentioned insurance protects against. But anyway, in most countries, being an incorporated bussiness entity already protects your personal assets and you can only loose up to the base value of your company, which is usually a minimal amount (for example it's only 5k euros for my company). Not much to worry about Link to comment Share on other sites More sharing options...
Scott Schroeder Posted February 18, 2014 Share Posted February 18, 2014 (edited) Why would that be the case ? That's exactly what the above mentioned insurance protects against. I would think in the case of you missing a deadline because of your own fault be it taking on too much, poor time management, lazyness, etc then I would think that would negate the contract. Insurance might cover you in the case of your client claiming misrepresentation, but that doesn't mean you still may not have a major financial liability to pay out due to the missed deadline. This of course assumes that the missed deadline goes farther than just an angry message from the client and you are considered a sole proprietor and are not protected under and LLC or S-Corp. Insurance isn't there to protect you and allow you to just miss deadlines willy nilly, then cover your ass completely. Insurance doesn't cover all forms of legal liability, which under the umbrella of legal liability lies contracts. So they may or may not be covered if they are deemed breached. It should note that my legal expertise extends as far as the Law and Order episodes I've watched, so I'm no Hang 'em High McCoy. I think for most of us, it's better advice to seek actual legal counsel on this subject if you are serious about it. But yeah, if you are wanting to get full bore freelancing you might want to sit down with someone and go over forming up an LLC or S-Corp as they are called in the US. That'll protect your personal assets and help with payments as well. A lot of larger places prefer doing business with an actual business entity rather than just a sole individual (even if you are just the only person in your company). Edited February 18, 2014 by VelvetElvis Link to comment Share on other sites More sharing options...
Nic H Posted February 19, 2014 Share Posted February 19, 2014 didn't realise you could get insurance for incompetence ? Link to comment Share on other sites More sharing options...
mowstn Posted February 19, 2014 Author Share Posted February 19, 2014 guys thank you. i can always count on my community here! i'm in the process of getting insurance and thinking about getting a GmbH (Germany) which is something similiar to the UK's limited. I was just unsure if it is common practice in the archviz industry to be insured against that kind of stuff. of course i know that a contract needs to be there and i always make one. also i would never accept a job if i knew that i couldn't deliver! but you know - anything can happen, so i wanted to listen around. thanks for your feedback! also, if you have experience and are insured yourself then please post the cases which you are insured for. cheers, mo Link to comment Share on other sites More sharing options...
Tommy L Posted February 19, 2014 Share Posted February 19, 2014 I dont think you need any indemnity insurance, just liability if you have premises and/or employees. I am an LLC and have no business insurance at all. Common sense when agreeing to deliverable and a solid contract with disclaimers should be enough. Link to comment Share on other sites More sharing options...
Scott Schroeder Posted February 19, 2014 Share Posted February 19, 2014 I think with an LLC you get some basic form of liability insurance. One side note to get extra insurance is in the case of loss of work due to external events, you might want some form of business insurance (http://www.entrepreneur.com/article/220125). For our industry this could be anything from power outages, hard drive failures, fires, storms, floods, theft, etc. If you operate from home, your homeowners policy may not cover it. Like any good insurance, you hope to never use it but if you need it you are glad you have it. Link to comment Share on other sites More sharing options...
notamondayfan Posted February 20, 2014 Share Posted February 20, 2014 I think with an LLC you get some basic form of liability insurance. In the UK, as a Ltd company, the company is only liable for the value of the business, but in extreme cases you can be ordered to pay more. I'm a 1 man Ltd company, and the limited liability was part of the reason for going Ltd. @Tom it's all well and good to have agreements, but also if you offer advice or something else along those lines, and the party which you advised loses out basen upon your advice then you could find you're self in a sticky situation. For me, insurance is a must, and it doesn't cost a lot either (I probably spend more on coffee than my insurance premium). Link to comment Share on other sites More sharing options...
Guest dialog Posted February 20, 2014 Share Posted February 20, 2014 True. But anyway, in most countries, being an incorporated bussiness entity already protects your personal assets and you can only loose up to the base value of your company, which is usually a minimal amount (for example it's only 5k euros for my company). Not much to worry about Exactly why I incorporated... Link to comment Share on other sites More sharing options...
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